A report from AARP is highlighting a new benefit many consumers can expect when it comes to prescription drug costs.
As part of the Inflation Reduction Act, consumers enrolled in Medicare Part D – which is around 56 million Americans, will soon be capped when it comes to how much they can spend on out-of-pocket prescription drugs costs.
Prior to this ruling, consumers were required to pay 5% of their prescription drug costs – with no limit. Starting in January 2025, consumers won’t be required to pay more than $2,000 per year out-of-pocket on their prescription drugs.
“Medicare Part D did not include a limit on out-of-pocket spending,” the report explained. “This left many enrollees, particularly those taking high priced or multiple medications, exposed to the possibility of significant financial burdens.
“However, the Inflation Reduction Act of 2022 included a benefit redesign that caps enrollees’ annual out-of-pocket spending and ensures that they will no longer face the prospect of unlimited cost-sharing every year.”
More consumers will benefit down the road
In an effort to see the widespread benefits of this legislation, AARP commissioned research that broke down how consumers will save over the next four years. Ultimately, more consumers across the country will benefit from the spending cap each year over the course of the four-year legislation (2025-2029).
In 2025 alone, over three million Medicare Part D enrollees will benefit from the spending cap. By 2029, that figure will exceed four million consumers.
On top of that, the savings from this decision is expected to be substantial. Researchers found that about 40% of consumers will see savings of $1,000 or more each year, while around 12% will save over $3,000 per year.
The report also found that consumers will save an average of around 56%, or $1,500, per year on prescription drugs with the new plan.
Additionally, by 2029, at least 10% of Medicare Part D enrollees will reach the spending cap in 19 states and Washington D.C.